tv Closing Bell CNBC August 20, 2015 3:00pm-5:01pm EDT
one. nasd is seson se. we are going to be watching this oselsill the "clong ll." as g to "closing bell oil nuar2016, showing a lot of weness that contract at $43.456789 "clong bell" picking up coverage right now. hi, everybody. welcome tohe "clong bell." dow is down 300 points. m klyvansthe nework stock exchange. >> i'm bill griffeth. i'm here thiss t last ho of adinstoc selng f. lo of moving parts and pieces. globowwn fea appear to be weighing on stocks. e feaybe getng adjusted to the idea maybe we will get liftff i septber. both the downd the s are now negative for the year. theasdaqs on track for its worsmontlm thr years.
netflix, facebook, appl a ttinhit today. >> only pcternd gbleown in t green. gold is rallyi. oiis bncinff i lows after getting closer to the$40 a rrelark today. we will take you live to e xomin. >> if you think volatility will not last,nkain. according to pimcts cef investment officer will join u veoiscuhy this market could be filled with more dra overheextonth or so. that's the key. bioth falling here wh theromaet. despite vaant'silon dollar deal makfhe ma viagr . y could srk moreeal acvitycrs tceith bioth wn day. thaidkeg , al isacoumte ien the. >>s g theit-gtt boisn tloovin
e. jaieeael flongil anolhire gngn poteecon te. inthi is bad declines. 1.5%, 5% across the board. i want to highlight two of them. consumer discretionary. y d by walt disney down 2%.ble almost twice normal volume. all the other media names. cbs down 4%. viacom weak here. time warner. they all started dropping after disney's earnings report august 8th. the additional comments from bernstein today weakening that group. this is double-digit declines for the month on all major media stock. the other group is the banking sector. they were market leadership group in the middle of the year and falling down as rates have come down and negated the buy
banks because rates are going higher story. goldman down 1.5%. jfrp p mjpmorgan down. here is twitter. twitter just broke the ipo price. that got attention down here on the floor as that number got passed a negative number for twitter overall. >> it's remarkable a day twitter down 6%, so is disney. there's not a lot of places to hide. thank you. gold spiking. crude oil getting a bounce. still within a stone's flow of $40 a barrel, jackie. little bit of a rebound? >> let's talk about oil first. september expiring today. did close $41.14 before it saw
an intraday low $41.21. what was interesting is traders are thinking we saw support after the dollar weakened, after the fed minutes yesterday. they are still pointing to a supply/demand imbalance saying we could see a spike here before we end up going lower. u.s. production is flatlining. it's not declining. saudi arabia production in july. 10.4 million barrels a day. a new note. russia. that weak currency making it cheaper to produce oil for them at home. a gazprom executive saying it will pump oil. we probably are headed lower. i want to switch gears and talk about gold. that was reacting to the fed minutes yesterday. a more than $20 move breaking through that technical level of $1150. traders that thought gold was left for dead are talking about seeing it hit that $1,200 mark
because the dollar is likely to stay low. gold traders are thinking that september rate hike is off the table. those are factors to consider. keep an eye on that hurricane danny down south as it moves towards the gulf. traders are worried about that. >> thank you very much. let's talk about it in our "closing bell exchange." what is your feeling about what this sell-off is about as oil continues to move lower except a bounce during expiration. gold rebounded. what's going on here? >> you've got a storm brewing out in the atlantic. everybody is missing the picture. you heard me talk about it before. the dow transports have been considerably weak for a long time. they experienced a death cross a
couple of months ago which is a technical term which is a bearish signal. and the emerging markets outside of china. when you look at those, they're down about 23%. last time we saw that sell-off, the s&p 500 didn't pay attention. that was in 1998. it suddenly caught up and sold off to the tune of 20%, 25%. that's what's going on here. people are starting to focus on this internal mechanisms around the globe. they are not liking what they are seeing. >> let's show everybody what is happening in interest rates. 10-year yield below 2.1%. gold traders think the federal reserve is not hiking in september. what do you think the markets are sniffing out here? >> since we don't have a rules-based fed, it's impossible to handicap what is going to happen. the market's interpretation for whatever reason,
money-sanctioned opinion doesn't add up to what economists and much of the fed speak has been leaning towards all year. i don't think it's a surprise. if you look a a behavior of the stock market post the bottom of 2009 there's been great years. we are moon shots with no corrections. this is the year we are in waning days of august and unchanged lower on the dow and s&p. pair that up with the 30-year bond. amazing the low yield may be banging away all day. look at a chart year-to-date of bonds. take a big red line, draw it at the end of april. left side of april, below the yield, right side above it. it's very digital. as for foreign exchange, hard to handicap what the value of the dollar is. if you look at a broad, nominal trade-weighted dollar index, it's doing great. emerging markets are included in that like the yuan and getting
hit. if you look at the dollar index, euro is doing better than the dollar. it's a lot of moving parts. i think it's paying more attention to global economics with horsepower with the fed minutes. short end is about trying to handicap the fed. >> a lot to work with in there, as always. >> larry glacier. "barron's" put energy stocks on the cover saying it's time to buy. citi out with a buy energy stocks. they continued to move lower. you like energy at these levels, too, don't you? >> what's been keeping me awake at night has been the high level of complacency and low level of volatility in the equity markets compared to the commodity markets, debt markets and currency markets. as a result of that, particularly after the fed yesterday, we are seeing an opportunity. it's time to take a look at some of these energy names. i'm not saying there aren't risks out there. when you look at six-year lose.
if your alternative is to buy a two-year treasury, a lot of negatives are getting priced in. a dovish tone out of the fed. will be negative for the dollar and positive for energy and commodities. that what is we are seeing today. looks like a bottoming action. that is a positive. with all this turmoil you create opportunities. for investors, take a more cautious approach on hi technology names getting hit today with the nasdaq and look at bombed-out other areas that will benefit as destabilization in the middle east elevates the price of energy. ultimately is a resurgence in asian economies. >> if people are looking to get out of names, perhaps there's
mashlg-in calls going on. there is a lot happening in the market. you are going to liquidate the stocks hit the latest term. bear markets don't start with a wholesale washout across the market. they start with a high-flying sector that starts to trade off 10%, 20%. if they breakthrough real substantial support levels then we need to start preparing across the market for that bear market we've been waiting for the last three years. >> you don't sell if you have a big tax bill coming. >> per yesterday's discussion. >> high-flying technology names are not beneficiaries of lower energy prices. there are innovation-based
economy. they benefit because they're net energy importers. perhaps look at some of the areas down in sympathy with what's going on in china overseas, then we can pick up at bargain basement prices. innovation technology and health care based. that is a great swap for investors to consider. tax law selling will be weak and put pressure on energy names. start digging through the rubble here. get great high quality names at discounted prices. be cautious at super expensive names that become a source of funds here. >> rick, you mentioned the dollar. we have news the greek prime minister is going to step down. what about the news flow there that's been quiet the past month or so. which way could that push us the next month or two? >> you are not going to like my answer. people like to talk about greece but i think the strength in the
euro is not strength in the euro. it's dollar weakness predicated on the distance between today and the first tightening. that extended so that downgraded the value of the dollar. the euro is the passive trade and greece is interesting topic. >> it all comes back to the fed. thank you, gentlemen. appreciate it this afternoon. we've got a market down 275 points. we have about 45 minutes to go in this session. you think if people were gaming the fed moving later, equities might respond positively to that. the opposite is happening. it seems to come back to growth. not seeing enough of it. a lot of names getting hit. >> dow was down 300. nasdaq down 114 points. with oil not too far from $40 a barrel, which country will be the first to actually cut production? will it be russia, saudi arabia or here in the u.s.? our pros will weigh in.
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sell-off day on wall street. utilities are the only sector higher today because of low interest rates. the dow down almost 300 points. that would put us back near the lows of the session. look at the nasdaq, down 120 points. 2.3%. one stock we are highlighting is twitter. fell below its initial public offering price for the first time. came public at $26. it's now below that or was. it's down more than 60% from its all-time high of $73.31 hit
december 26, 2013. >> crude prices are at six-year lows. major opec producers continue to pump record amounts of oil. that includes big players like saudi arabia, iraq even, iran and russia and the u.s. don't seem to be letting up either. >> which country will be the first to blink and cut production? joining us now is u.s. managing editor at the "financial times" and executive chair of the money map global energy symposium. good to see you both. jill, you get to play the guessing game here. who do you think blinks here? >> i don't think anyone will blink deliberately. a lot of countries are coming on stream and feel low pressure to sell that oil. the question really is what saudi arabia does. it's indicated until now it wants to keep its 4 million barrel a day target there. the big question is will it do
that inside opec or at the expense of the rest of opec? >> opec is an interesting entity here. everybody is trapped, right? they are all players of the same game. they all need cash desperately to service their balance sheets. it makes it worse for everybody else. who blinks? who stops this? >> i think number one we have to recognize only saudi arabia was kuwait and united arab emirates can afford that play this game. everybody is losing money. there has been a considerable amount of excess production and excess exports beyond individual countries, opec monthly quotas. one of the reasons why the saudis have increased their production is to cover up the fact there is no cohesiveness left in the cartel. >> they are borrowing money. they are showing the wires now.
they're not the strong swing trader they once were for opec. >> absolutely not. you are quite correct. the overall debt market internationally in crude oil is going to experience a major change by the time we get into october. the first element of that is going to be a whammy for small cash poor companies in the united states that are simply going to go under. longer term, we are going to see some of the large national producers. those associated with opec and even the gazproms of the world taking it on the chin. >> it still feels like we are at the beginning than the end of how this is going to play out. >> if you talk to people in the energy sector, projections for oil prices keep getting cut. i was with people over the weekend looking at $45 to $70 a
barrel. they are hedging next year's oil production below $50. that is a big change from last year. the second point is the next to drop could be the financial sector. the financial sector's exposure to these oil companies energy sector. i was chatting with someone over the weekend talking to one of the big banks. they reported that 72 out of 74 of their lenderes or borrowers asked for covenant changes. >> i could lead to mergers and acquisitions. >> absolutely. >> i heard the argument, if we see a pick-up in mergers and acquisitions in the energy patch, that interestingly could lead to higher prices. >> of course. that could take te thgh founel rhtow fantesikau arabi are stl borrowi money in the catal mkets toeep their
infrastrturep --et u not forget saudi arabia need an o barr price of $90 toake i balaed bgetbalance. the fact people like saudi arabia areoublg u sho kind of pressure that could keep oi pris lgor quite a long ti. >> oc came about in response to an oil pce collapsin the past. is it possible we start to see some sort of similar colluding this time around? ere is no other option and a lot of these countries are going to have to figure out how they do something that is ultimately in their best interest. >> absolutely. i think we have a couple of factors here that are going to be decisive. the saudis we are estimating are losing about $800 million a day in terms of the current pricing format. if you go to the venezuelas of the world where they need $140 a barrel for pretense of balancing their budget, this is a spread that is getting worse and it's going to have an impact within
the cartel itself and more and more of the exports will be taking place outside of the cartel dimension. >> let's not forget when you look at russia is $120, that's the figure, iran is even higher. these are scary numbers and scary gaps. >> we'll leave it there. >> the real battleground is saudi arabia versus russia for control of the asian market. that's where the russians are going to start feeling the pain first. >> we'll watch it carefully. thank you both so much for being here. >> very interesting. >> for more from oil, check out my article "the oil bottom is when the handcuffs come out."
>> the dow is down 290 points. look at the nasdaq. we keep pointing that out. down 2.3%. we are sitting on 4,900. >> up next, the high-flying biotech sector is selling off today despite valeant's billion dollar purchase of the company making that female viagra. meg terrell will discuss the sell-off and whether more biotech deals are in the pipeline.
welcome back. not much green on the heat map or traffic map. this is the nasdaq 100. just the 100 names the nasdaq of the index down more than 2% today. >> five are positive. >> that's it. if you look at the names struggling, it's across the board. netflix, directv. media space, obviously. >> valeant buy sprout pharmaceuticals, the makers of the female viagra drug that was just approved.
the deal, $1 billion. >> could today's sell-off spark more deals across the publically traded space? meg terrell joins us now. >> we like these sell-offs. there's been such a run-up in this space, will we see people coming out? >> it's possible. people have been hunting so much at those higher prices. it's hard to think lower prices wouldn't increase their appetite. you look at valeant stock. it's down 6% today. when acquirers were getting punished for buying, valeant was getting rewarded.
why would sprout sell after they get the approval? >> it's hard to say no to $1 billion. there are questions how widely used this drug will be. folks worry about safety concerns. it should be on the shelves later this year. there will be a lot of restrictions how it's prescribed. >> the bigger picture. is this a special situation or will we see more down the road? >> will be more biotech deals. there are a few situations going on right now. these deals will continue. you hear about pfizer and allergan. will we see big combinations? folks are talking about that. as biotech comes down, people are looking at bigger bargains. >> if the market is selling off
because that confidence is gone, the confidence to do $40 billion plus deals won't be in the board rooms. is that what we have to watch? sure, it's getting cheaper, but not against the back drop of some concerns of another crisis? >> that's an interesting question. folks say if a biotech drug works, you can never overpay for the deal. if it doesn't work, you lost all your money. it's interesting to think about people buying at these high valuations. if the drugs work, it's still good for their business. >> meg terrell, thank you. >> thanks, guys. time for a cnbc news update with sue herera. >> here is what's happening this hour. greek prime minister tsipras says he is stepping down and calling early elections. after suffering a rebellion with his left wing party over the new bailout program. >> former president jimmy carter
says his cancer spread to his brain and he is a ease with whatever comes next. he will begin radiation treatment today. he said he thought at first the cancer was confined to his liver and had been completely removed by surgery. an mri showed fourmall spots on his brain. >> south carolina governor nikki haley says any plans to move detainees from guantanamo bay to her state would be a mistake. >> investigators plan to recommend prosecutors file charges against caitlyn jenner for a crash in malibu last february. a 69-year-old woman was killed in that crash. back to you both. >> thank you so much. >> half hour to go until the close here. what a day. the dow is off nearly 300 points. we noted big declines across a
wide array of names. disney down 6% to twitter down 6% to biotech names getting hit here. >> could we see a comeback in the close? a top trader will tell us what he is keeping an eye on this last half hour of the trading day. >> pimco scott mather tells us why there is more volatility ahead. a cnbc exclusive next.
welcome back. keeping an eye on these markets. three components of the dow in the green. walmart, procter and gamble and johnson johnson. the kinds of places you go to ride out a market storm. check out disney falling on a downgrade by bernstein to market perform from outperform. this getting a lot of commentary. analysts calling for new framework to value the media sector because of declining tv advertising. netflix is losing ground today. >> we are in the final half hour of the trading day. we want to get the bigger picture with our friend mark
newton. you have a daily chart of the s&p and a weekly chart. what are they telling you? >> we've seen the most volatility since the beginning of july. indices have not cracked levels in terms of support. we need to get down under this level near july lows to thick anything has been violated. >> which is where? >> 2044 on the s&p. we did get there initially today. we since have held in the last half hour, held that, as well. nasdaq 100 and s&p are still right at these levels. we've not p capitulated. i'm looking at the amount of breadth capitulation. the key will be to break down under these lose. it's not a 200-day. it's how an index or stock trades in comparison to the slope versus a break of that.
>> here's the trend. the's been intact since 2009. you've seen a little bit of sign of consolidation here since the beginning of the year. now everybody is saying because of china weakness or endgame for easy money that we are rolling over. we haven't seen the start of any sort of rollover. you want to see some sign these lows can be breached. think the trend from 2011 is giving way. we haven't seen that. pessimism is on the rise. these consolidation rates remain intact. >> it is confounding to some, isn't it? >> it is. it's been a wild week for markets. we are joined on a cnbc exclusive by scott mather. welcome back, scott.
>> are you sticking your neck out saying there is more volatility? >> the real surprise would have been if we didn't see this uptick spilling into equity prices. it typically happens when we get close to a fed tightening. we thinke are getting close to a fed tightening. we should expect to see this. in addition, we had a lot of volatility in currency markets and commodity markets. would you expect a spillover into other financial assets. what we are seeing makes sense within that context. >> yesterday when the fed minutes came out we saw a steepening of the curve. it was because the short end was going lower rather than the long end going higher in anticipation of a fed raising rates. what do you think the market's thinking now is? it thinkin september, december? >> the market is thinking december with a question mark.
we think that is a bit of a mispricing. the fed minutes might slightly reduce the odds of a september lift-off. we still think it's at least a 50% possibility. look at this market today. what is that telling us? >> one mistake is mapping the commodity weakness which could impact the u.s. we shouldn't forget production in commodity prices is a good thing. we had a big drop in interest rates. that partially offsets some of the strengthening in the dollar. we think people shouldn't become too gloomy about global growth. much of the down turn is behind
us. one should be careful misinterpreting the drop in commodity prices, which we think has to do with supply. >> you sound more positive on global economic growth than a lot of people out there who fear we could be heading toward a global recession minus the u.s. >> well, we think people should look carefully. this is a year when we are going to see the biggest growth in energy demand in the last five years. what we are seeing is this temporary period of time where supply is overwhelming demand. within a couple of quarters, we think that begins to reverse. that energy supply shock has been putting pressure on other commodity prices. we don't think it's telling you much about the global growth picture. >> long term you sound bullish. near term race for volatility. are you talking about the vix going above 20? staying clear of the financials?
how do you translate that. >> what investors should be doing is making sure she are not extended fully out of the risk spectrum whatever they are doing. there is going to be many more opportunities to add risk at favorable prices in the quarters ahead. so that's one way investors should be protecting themselves. other things is look for the defensive aspects of their portfolio. if they're bond investors, they need to make sure they are invested in high quality bonds to some significant extent. you can expect we are nowhere near the end of the turmoil that is going to impact the high-yield market and energy sector in particular. it's looking carefully at what you hold and making sure you're bias to have a higher quality bias at this point in time.
>> do you think the 10-year is going appreciably higher here? >> we don't think. the 10-year is mostly impacted by this inflation which we think is myopic. as it becomes clear the u.s. economy is not going to materially slow from these developments, we think the 10-year goes back to the mid 2% as the fed gets under way. >> here we go. 19 minutes left in the trading session. dow down 290 points. haven't seen art cashin wander by yet. we'll see what the imbalances are as we head towards the close. >> dow heading back to the lose of the session off 295 points. >> the fed is right and donald trump is wrong.
just ask cnbc's larry kudlow who is taking on the presidential front-runner for some of his economic policies that he's been talking about lately. larry will join us live coming up. that should be fun. first, why earnings season could be in jeopardy with herb greenberg. ♪ ♪ if you can't stand the heat, get off the test track. get the mercedes-benz you've been burning for at the summer event, going on now at your authorized mercedes-benz dealer. but hurry, offers end august 31st. share your summer moments in your mercedes-benz with us. dentist appointment when my teeth are ready? ♪ can it tell the doctor how long you have to wear this thing? ♪ can it tell the flight attendant
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stocks trading lower with the dow down 1.5%. nasdaq down 2.25%. philadelphia semiconductor index falling to its lowest level of the year today. semis going lower. analysts say macro concerns about china could be hurting the chip group. the sox itself is down about 15% over the past three months alone. it's just about in bear market territory down nearly 20% from its 52-week high. >> ouch. let's get more from today's sell-off with herb greenberg. good afternoon to you. what do you make of this? dow off almost 300 points. >> the way we are looking at it, individual names. we are short biased. you look the a the names that have come down. you have to figure out whether the fundamentals in some of
these names have now been priced into the stocks. whether it's a green mountain which is up today or home capital which is up -- >> you beat us to it. >> you look at green mountain which we believe is the business model is broken. on a day like today, the stock is up. if you are thinking about coke, you have to say they bought it at an average price somewhere in the $80s. if they are not buying it here, they ain't going to buy it. you don't know why it's up. you look at some of these names. there are still issues there we think are pertinent. they could still cause risk to these companies. >> do you think this is just we are in a period where the momentum players are fleeing those stocks that they already made a good deal of money on so
they are getting out of that and going somewhere else? or is this a market getting adjusted to the concept maybe the fed is going to start raising rates pretty soon. >> yes. >> i knew you were going to do that. >> we know in a momentum market, especially a lot of the investors in this market have only been around a few years or ten years or whatever, they only know a market that goes up. they know how to play the momentum. when we were doing this before they were around, we would talk about momentum in reverse. days like today and times like this you see the momentum in reverse. you have to ask yourself, we've been through so many of these markets in turmoil moments of days you say to yourself, it's like the scary moment in "pirate of the caribbean" before you go into the fall. a few days later, it's "zippety do-da" and everything is fine again. we never know when it's going to keep falling. >> talking about the ride, not
the movie, folks. >> lipton arguing what we heard on the campaign trail and economists of the bank of england. time to get rid of quarterly reports. you said these start-up companies shouldn't be giving guidance and such. what about getting rid of earnings season all together? >> that is the stupidest thing i ever heard. as a guy against short termism, i will tell you the one thing about quarterly reports, even if the numbers are made up, is that they give you transparency. they allow my partner who is a forensic accountant to get an idea where a company is really heading or what is going on. >> how do you get rid of short termism? >> you don't give guidance. don't play into the wall street game. the minute you start giving guidance, you are managing to
wall street as opposed to managing for your customers, for your suppliers, for your business, employees, stakeholders. that is what earnings guidance is. it's a big game. look at companies that don't give guidance like google. they can get away from it. others are told they must give guidance. >> all right. very good. always good to see you. >> good seeing you. >> herb greenberg. >> hate that picture behind him there hope that's a painting. >> ten minutes to go into the close here for the final hour of trading today. looking at a dow down almost 300 points. nasdaq down 2.4% and not many places to hide. >> kelly and i said in the past, if it's friday, it must be david darst, with this week's massive sell-off, we thought it best to get the esteemed financial consultant in a day earlier. he will join us next. at ally bank no branches equals great rates. it's a fact.
side. $1 billion to sell going into the close here. >> joining us is independent investment consultant david darst. three-day sell-off. is this ultimately going to manifest in calls for the fed to do something? >> it makes sense giving the lead economic indicators coming in light this week. europe is still 11% unemployment. their inflation rate is so low. that's the worry. global deflation. you had oil prices flirting with the $40 number. for the market to get its mojo back, you've got to see a good back-to-school retailing sale season which we do not see. i say stick with winners this year. go with home builders, home
improvement. those sectors are doing well. one of the best sectors this year is the billing materials. you want to go with these. don't get yourself caught up trying to play too much biotech. they had their run. take it. the only three stocks positive, consumer oriented plays out there? >> could you nibble at energy. don't get a full position. you've got these dividend yields for the big ones at 5% and 6%. are they going to cut the dividends? they may cut capital spending and keep the dividends. that's where i come out. morgan stanley's base case is an improvement. housing and jobs continue and the people begin to spend if that does not come true, you are going to have more of this, the
summer doldrum. it is being done on light volume. that billion dollar number from art cashin notwithstanding. >> you can still lose money on light volume or heavy volume. >> does it hurt worse when you get hit by a ton of bricks or a ton of feathers? hurts the same way. >> still a ton. thank you very much. we are coming back with the closing countdown. we are heading lower with the dow down 325 points. after the bell, we'll have complete coverage of today's massive sell-off. earnings from the likes of hewlett-packard and the gap. how will they fare? stay with cnbc, first in business worldwide. ♪ if you can't stand the heat, get off the test track. get the mercedes-benz you've been burning for at the summer event, going on now at your authorized mercedes-benz dealer. but hurry,
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and get up to $500 in total savings. selling is getting serious here. dow down almost 350 points. we'll show you the dow, s&p and nasdaq as they traded lower today. nasdaq especially getting hardest hit. now down 2.8%. we had $1 billion to sell. lately would have 300 million to sell. it would be paired off. enough buyers to match that. >> i think a billion is significantly significant. we were 13 a few days ago. i pay attention when it gets to
20. i wonder if we can put the s&p up a year. this is not a lot of consolation. we are only 4% off the low. 2130 was the old high which was right -- thank you. we rehearsed this beforehand. >> it's our fault. >> 2130 was the old s&p high. we are only 4% below that. bear that in mind. we north close to a 10% cut. >> let's do the vix chart now that i asked for it. sorry. >> the volume has been good for a summer day in august. >> on the sell-off.
>> on 800 million on the floor. summer is august, that's pretty good volume. >> we are not finished. dow down 346 on the close. news from gap and hewlett-packard coming up on "closing bell" with kelly evans and company. see you tomorrow. >> thank you, bill. welcome to "closing bell," i'm kelly evans. dow down 355 points at the close. this is a three-day sell-off. this the worst of the three. s&p 500 having one of its worst days of the year down 43 points. the nasdaq by far the worst performer with declines across the media space, the biotech
space, the semiconductors. we'll get to much more of this in just a moment. investors are hoping a trio of earnings we are waiting for can give this market a boost. we've got dominic chu waiting for hewlett-packard results. josh lipton over salesforce and courtney reagan covering gap's numbers. we have john fortt here, stephanie link and for more on earnings, christine short. and guy adami. it is a packed house. stephanie, what in the world happened today? >> it's about uncertainty. the fed yesterday, we don't know what they are going to do. it wasn't very clear when they are going to raise, if they are going to raise, can they raise. you have oil declining big time. deflationary concerns. you have it being the summertime. it's also a lot of people are not around. volatility is picking up. volatility is going to stay. there are these uncertainties.
what i thought was interesting today, they sold off those growth stocks. they sold off software. they sold off cyber security, the banks because of rates. then they bought the defensive stocks. >> guy adami, a quick word from you. you've been talking about the risks here. maybe global deflation. we look at the 10-year below 2.1%. is this a market suggesting the fed isn't going to raise rates? why aren't equities getting a bid? >> it's not about the fed. a quarter percent, no percent doesn't matter. they control the front end of the curve. i will push back on stephanie. there is never certainty about the market about anything. it's i not about uncertainty but the fact things are starting to come to fruition for some people. they are finally seeing maybe the things going on in the world
aren't as good as they are seeing. maybe this oil move, though great theoretically for the consumer has far-reaching effects. maybe there is a global slowdown. the last shoe to drop should be the s&p. 2054 being the level. broke today. russell broke last week through 121. things are starting town raffle. i'm not doom and gloom. it's not about that. looking at the tea leaves and trying to figure out what's going on in the world. >> the market does not like uncertainty. there are concerns about the international growth prospects. here in the states, housing is doing well. consumer, there are pockets doing fine. it's not all doom and gloom.
there are places you can put your money. i think that the market doesn't know how to handle all these various different things at the same time while people also are on vacation. >> i'm not all doom and gloom. there is always uncertainty. maybe it's just heightened uncertainty. yes, there are patches of the economy that appear to be doing better. there are patches of the economy not doing well at all. now this has become a global story. there is a meltdown going on in china. >> john fortt, we saw big declines across the semiconductor space. suddenly, it's almost in bear market territory. what's going on there? >> a few of the semis have been doing bad all along. today we saw micron leading the
decline. sandisk behind it. just related stocks. skyworks, avago. sales force was going to report. that was down in the cloud space. i think salesforce earnings today are particularly important. they are a category leader in software as a service and cloud. if you want to believe a growth story, you need for salesforce to sound a bullish on this call as they did a quarter ago. >> you heard david darst last hour tell us he thinks we need a nice back-to-school season to turn this market momentum around. consumer discretionary had its worst day since april 2014. >> gap putting out second quarter earnings in line with expectations at 64 cents per share. gap does report monthly. we knew same-store sales down 2%. revenue $3.9 billion.
gap reaffirming its full year guidance. that is something positive for the company. that guidance range is $2.75 to $2.80 for the second quarter results. >> we are talking about consumer discretionary hit hard today. at the top of the list is netflix, viacom, disney. there are very different things going on. >> i'm not surprised by this gap number. they missed our estimate by one penny and slightly missed on revenues. we know the gap story. they are struggling with competition from h&m. there are certain discretionary names doing well. even in retail space, the consumer is value-driven. you'll notice same-store sales numbers, old navy was the only piece of the gap network able to put up same-store sales growth. you have banana republic.
people are looking for value. what i'd like to hear about as athleta. that is a brand doing well along with old navy. >> guy was saying when i asked about the fed, this is not a market about the fed. is it about earnings? are earnings topping out? are they tipping over? >> i think earnings are a secondary indicator. even over the last few quarters. it's all about the fed. maybe some of the big companies like apple are able to drive the markets when they report these blowout earnings. with the lineup today, sales force, gap, hp, i don't think they will undo bad news out of china. >> let's get to dominic chu getting results from hp.
>> shares are down on 50,000 shares trading volume. earnings coming in 88 cents per share. analysts were looking for 85 cents per share. revenues coming in slightly lighter than expectations. $25.3 billion. analysts on average were looking for $25.44 billion. taking a look at guidance for its current quarter and full year. it does appear it falls a little lighter than analysts on average were looking for as a result, a mixed picture for hp. those shares down by about 0.5% right now. just a little, over 60,000 shares of trading volume. a stock set up here down about 30% year-to-date. right now down about 0.5% around 57,000 shares worth of trading
volume. back to you. >> getting numbers about just how bad a session it is. we just had the worst day of the year for s&p 500 and dow. you can see declines more than 2% for those indexes. it's the worst day since february 2014 for the dow and s&p. difficult session for hewlett-packard to do well. >> not as bad as i might have thought on a few lines. personal systems revenue. that is the pc group. it was down 13%. they did manage to eke out a 3% operating margin. desktop units down 20% which reflects that the xp upgrade cycle in the enterprises over. printing revenue down 9%. you don't want to see that. in the enterprise group,
industry standard servers did okay. they were up 8%. that is a cloud-challenged group. could have been worse there. networking revenue up. you want to see them growing faster. they actually are. not so bad. especially because of those server numbers. services not looking good. >> calling earnings a secondary indicator for this market, it's not all about the fed. what does this come down to? are we looking at a global growth scare? >> yes. if it was about -- yes. i don't think it's that hard to ascertain. crude oil down 110 down to 40. demand factors in that equation. if it was about the fed, why
aren't rates going higher? the market didn't have a good day today. if the economy was as strong as the stock market recently suggests, interest rates should be closer to 4% on the 10-year than 2%. so far the market has looked past it. it will no longer look past it any more. i don't think the chasm between the economy and the stock market has ever been wider. the economy is not nearly as strong as the stock market suggested that it is. >> steph? >> i think there are pockets here in the economy that are doing well. i think the consumer is very important to see the consumer doing well. they are doing in pockets, they are spending, they are very choosey. >> we heard this from macy's. they are spending on housing,
autos and health care. >> i don't think you can say with a broad-brush the economy is not good. there are several companies report i reporting good reports. >> let's get over to salesforce.com. the company reporting eps of 19 cents. 2 cents better than the estimate. coming in $1.63 billion on the revenue side. >> a few other numbers i pull out of that release. deferred revenue sales force clocking in at $3.03 billion. up 29% year over year. street was looking for $3.05
billion. guidance, sales force is raising its full year revenue guide to $6.6 billion to $6.63 billion. they've blown past the $6.5 billion annual run rate faster than any other enterprise software company. that puts sales force on race to have a seven-year run rate. analysts want more about the guide. enterprise wins that. conference call starting at 5:00 p.m. eastern. >> a quick word here. a company like sales force beats, shares up 2%, a difficult market day. could this turn sentiment around when everybody comes in tomorrow and sorts through what happens here?
a all the people in that orbit who want to tell a growth story despite concerns. the annual guide before had been $6.52 to $6.55 billion putting it up over $6.66 billion. that is shows confidence. >> don't miss jim cramer's exclusive interview with marc benioff tonight at 6:00 p.m. on "fast money." guy adami, thank you for your insight. catch guy coming up on "fast" at 5:00. all the latest headlines from hp sales force and gap earnings calls. >> it's getting ugly for the bulls after our rout on wall street today. >> speaking of routs, oil prices touching another 6 1/2 year low. my next guest says buy oil now because it willing over $60 by october. he'll making the case when we come back.
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i think about my own kids. they're the reason that i want to protect our community and our environment, and if me driving a that truck means that somebody gets to go home safer, then i'll drive it every day of the week. together, we're building a better california. welcome back. today marks the worst day of the year for the dow and s&p 500. down 358 points for the dow down
2%. 2% decline on the s&p, down 43. the worse session since february 2014. nasdaq down 140 points or 2.8% today. we'll see if those sales force earnings can turn that around tomorrow. crude oil slightly higher today, but down nearly 24% since the start of the year. many investors are wondering when there will be a bottom. joining us is ron mills from johnson rice who thinks oil with it hit $60 to $65 by year end. with us john kilduff who thinks oil is going much lower. ron, $60 by october? >> i thought i said by year end. with the data coming in, you had the capital declines has driven a sharp decline in the rig count. eight of the last ten weeks you've seen u.s. production decline on order of about 250,000 barrels. if we look out over the remainder of the year, based on
recent commentary, the capital cuts will get even greater over the remainder of the year. we expect u.s. production to exit the year somewhere below 9 million barrels a day which should drive that. >> john, why don't you think oil price is coming back? >> i just don't think the production rate is going to decline as much as your other guest. for me, the shale industry players are doing the equivalent of the bible with the fishes and loaves where they keep produce more oil with less and less rigs and less and less capital investment. i just don't see it coming down that fast to enable that kind of a price rise. saudi arabia and others around the world killing each other with more and more oil, i don't see it ending that quickly.
do either of you kind of worry about that, that maybe this is going to prolong kind of the, as we wait for the decline to actually happen and for us to see stabilization? >> i think it's going to be a wrecking ball through this industry this fall, stephanie. i think you are starting to see debt get priced in distressed terms. this is going to be a reset on many of the portfolios on borrowing basis of these companies pricing in much lower oil prices as you look out the curve. we are at $48 a year from now on the nymex curve. there is almost no hope in sight on that basis. i think that will be part of a rebound in 2016. not until we go through an awful lot of pain in the sector. >> why do we go down in terms of production if capital is flooding in?
>> ron. >> do you think production will decline if we have capital coming into the space and everybody needs the cash production generates? >> i think that's what happened in march. when you had over $10 billion get funded in terms of equity in the industry. since that time, the equity market and debt markets have become unavailable and coming up with this fall's bank redeterminations, commercial banks are expected to be much more conservative and reduce company's access to capital. i think the captaompany's acces capital will dry up. >> we heard that last hour, as well. what is your take playing the energy space here? >> the only way you can do it is owning high quality companies, leaders in the industry. maybe special situation stories, those kinds of things. and dividend yields. even those haven't been protected. it's very hard. i've got to take a long-term
view, which we do. you have to have dry powder on these horrible days so you can be picking for the long term. >> exactly. we'll leave it there. thank you. ron mills and john kilduff. >> thanks. speaking of oil, there is another spark column. go to cnbc.com/the spark to see why the oil bottom might not be in until the handcuffs are out. >> a pair of earnings alerts. >> let's start off with shares of intuit. shares down 3.5%. they were down much more earlier on. the company coming out and reporting a net loss of 5 cents a share. better than what analysts were expecting. revenues a little light. $696 million. analysts looking for $739 million. some other big notes here. the company says it plans to sell its quicken unit, the
personal finance software part of intuit and boost their dividend by 20%. their plan strategically is to focus on business, small business software and tax preparation software for the u.s. and canada. shares off 3.75%. ross stores down sharply. down about 9.5% on nearly 350,000 shares of volume after the off-price retailer came out with earnings beat 63 cents a share. revenue $2.97 billion. it looks as though their q-3 and q-4 earnings guidance falls below some analyst estimates. we are looking at ross stores, a stock up 17% year-to-date. 58% over the past 12 months, now down 9.5%.
chose to 10%. two big movers here after hours. >> thank you very much. >> don't go anywhere. is the correction we've been waiting years to see? >> larry kudlow will tell us why he thinks this market meltdown is proof the fed is right not to raise rates right now. [ male announcer ] whether it takes 200,000 parts,
welcome back. dow down 358 points. 2% declines across major averages. nasdaq gave up almost 3%. dominic chu with a look how we got here. >> we've seen weakness over the past couple of weeks. if i take a look at the s&p 500 year-to-date, the chart has been sideways up until now a real break to the downside. that means we are trade blowing the shorter term and longer-term average prices for the overall market. that may be a sign for pattern watchers that may be some bad times due ahead. no teaeaves that can tell for certain. some traders point to a bearish level coming up the s&p. for the nasdaq composite year-to-date, seeing signs there. this is the first time on an intraday basis, the nasdaq traded below its longer-term average price since october 20th. on the tech-heavy,
biotech-heavy, nasdaq composite, that is something the traders watch. overall sector drilling down more. with regard to the laggards today, retail stocks took it on the chin. consumer discretionary, one of the worst days since last spring. technology, financials and industrials. the reason why that is important is because tech and industrials, financials, health care among the biggest weightings in terms of sectors for the s&p 500. among some of the relative le leaders, you can't see utilities which were green at one point today did manage to finish the day lower. energy and telecom, some of those guys down big. relative outperformers. we want to frame all of that around some of the more macro picture here. yields on the 10-year u.s. treasury note below, dropping below that 2.10% mark. we are trading a hair above
2.07%. yields falling as people buy up u.s. treasury notes on the long end. we will see a relative amount like the utility stocks and real estate investment trusts. the question becomes how we set up going to tomorrow morning's trade. it's going to be a b ticf coerti tig aar tomorr morning. back to you. >>nterting today, we saw both the high fliers and unlod stocks getting hit hard. ta a lk at nelix. at was one of the biggest decliners all y. the wor decne for netflix on
a percenteasisince seembe2011. on 5% ti. ke a look at the stock. the stock more than dou this year you take a look at twitter, which s bnpummeled. today it had average volume for e lt0days, but it did dip bew it ipo price of $26 a share. hit a loaf $25.. weaw a spike in volume when it got back towar tha lev jt as we were heading into the closg be. looked le someone steed in to protect tha $26 mark. closed right there on the nose. apple hit a fresh six-month low of $111.63. gartner today saying the iphone markethare inhina slipped two points in the second quarter year over year, while samsung's ro. overall, smart phone sales in china were weak falling for the
first time year over year in an awful long time. we did see negative sentiment on apple. did close off the lows. you've got to wonder whether apple might have put some of that cash from its massive buyback to work. >> john fortt, she mentioned netflix, twitter, apple all getting hit. which is most significant to you? >> of those, i'd have to say netflix. we are used to seeing apple and twitter get hit in this market. of the 89 tech-related stocks i track, 43 were down more than 3% today. that is nearly half. >> more than 3%. ouch. time for a cnbc fuss update with sue herera. >> here is what's happening this hour. attorneys for former virginia governor bob mcdonnell asked supreme court justice john roberts for an emergency order which would allow him to remain free while he appeals his conviction to the high court. an appeals court refused to allow mcdonnell stay out of
prison while he appeals. >> hackers released a second larger batch of data stolen from the infidelity website ashley madison it includes source codes and ceo e-mails. >> republican presidential candidate marco rubio addressing the detroit economic club, outlining his tax reform plan. rubio who criticized the auto bailout blamed congress for the struggles of middle class americans. >> hurricane danny is the first hurricane to form in the atlantic ocean this season. this photo was taken by nasa astronaut scott kelly aboard the international space station. looks like a big storm showing danny centered about 1,100 miles east of the windward islands. that is the cnbc news update at this hour. >> that storm already has the attention of oil traders. >> absolutely. >> thank you for now. how worried should you be
about this market meltdown? find out if the correction we've been waiting for is coming up. >> larry kudlow on why he agrees with the fed right now. reat rat. it's a fact. kind of like mute buttons equal danger. ...that sound good? not being on this phone call sounds good. it's not muted. was that you jason? it was geoffrey! it was jason. it could've been brenda.
the worst day for markets all year. the sell-off enough to push is back onto the red. we are below key levels we were celebrating a few months earlier. dow below 17,000. nasdaq well below 5,000. let's bring in bob pisani for more on this sell-off. >> i'll tell you what's frustrating everybody. what exactly changed the last 48 hours in the world to see this mini collapse of the marketplace? i'm baffled by it. i get up at 5:30, china is way down. european open is lousy. futures are lousy. anybody know what's going on? can you give me a specific reason? nobody can give me a reason. vague sense of doom and gloom. china's weak, brazil is down. this fear gripping the markets the last couple of weeks man fast itself into this notable little sell-off. >> we can't point to volume. as we learned, we had the heaviest volume since 2012.
>> could you argue this is china's makeup coming off. when my make-up comes of you, see the dark circles under my ice. >> i've never seen dark circles under your eyes. you are a rock star. that analogy doesn't hold. you are right. the market is showing the dark circles under its eyes. what i see here what traders call degrossing. taking down their exposure. typically in the global growth names. when you don't know what's going on, look at the market and say, they're taking down their exposure in the global growth names. they are derisking in those particular areas. that is that vague fear out there. >> there are pockets are opportunity. who are the beneficiaries of lower oil? airlines? consumer staples which held up well today. a very underowned group will be
a beneficiary of lower commodities. the consumer. if they fall, we are in big trouble. we are running about 2.5% gdp. not higher than that. that's why the fed is not rushing to raise rates. that uncertainty is causing a little bit of aggita. >> people are saying maybe this is about a deflationary spiral. there is this vague sense of fear. the last ten minutes were horrible. there is no buybacks to occur. companies have been particularly strong as stocks have been down which is when you should buy. they are not allowed to do that at the close. their lack of presence at the close may have been a factor. >> thanks for mentioning it. we want to drill down into
today's tech sell-off. dan covers stocks including apple and microsoft. why does apple keep getting drilled and why is tech going down with it? >> it's all about china. the fears are starting to increase. almost like a forest fire. bears yelling "fire" in a crowded theater. comes out of that china growth story. ultimately, we believe this is overdone. it is like fighting a ghost until they come out with their launch september 9th. till they show the numbers. ultimately, i think bulls will be proven right. next six no nine months. this is an opportunity to own this name. it's a white knuckle period with apple given the bears piling on. >> for a lot of them. >> i think it's interesting. you mentioned apple and china. apple has been trying hard to send the market signals things in china aren't as bad as people
fear based on saying that in the last earnings call. then several days ago putting out the news that the app store sales in china were stronger than historically. not only aggregate but a take-per-person basis. then you have amazon's cloud outperformance broken up the first time last quarter. we've got this sales force raise today. mobile and cloud, the winners seem to be signaling they are continuing to win. isn't that a silver lining story there? >> you saw that the past quarter. cloud, cyber security, big data. you look at china and overseas market. we saw good earnings. think second half you are going to continue to see strength there. that's why during this period as an investor, you look at the high growth area. cyber security, palo alto. i view apple, microsoft, microsoft has a five in front of
it with another strong quarter. this is the time to look at these names, sharpen the pencil. hit from the black tees. >> thank you for joining us. >> let's get back out to dominic chu with another earnings alert. >> here is what we've got here. speciality grocer fresh market which is down decently right now on scarce volume. down about 11% on 59,000 shares worth of volume right now. this after the grocery store chain came out with earnings at least coming out that missed analyst estimates. analysts looking for 40 cents. revenues coming in lighter. $442 million. analysts looking for $458 million. they see full year 2015 earnings per share between $1.55 and $1.65. that misses average analyst estimate of $1.85. they are also saying their comparable store sales second quarter were down by about 1% on
average analysts were looking for 0.8% increase. they did announce a new $200 million share repurchase program. you can see on balance those shares are down by about 11% in the after hours on 59,000 shares of volume. year-to-date, stock is down 35%, over the last year down about 14%. nonearnings related story involving sysco. they provide wholesale bulk food items, shares moving up on light volume. 8,000 shares after activist investor nelson peltz have been elected to the board of sysco. sysco was trying to merge with u.s. food service. they terminated that agreement. this comes on the heels after scott walker told us the news last week they had taken a stake in the food distribution giant
the major indexes in over a year, the dow down more than 350 points. some market watchers think today's sell-off is a reaction to a pending rate hike. janet yellen is scoring points with larry kudlow who says in a red-hot cnbc op-ed donald trump couldn't be more wrong with his policies. what is going to surprise people who follow your views closely. you're the free market guy. focused on profits. you come down on the fed side of things relative to the donald what do you mean by that? >> with the fed, i don't see inflation. commodity prices are falling, gold, oil, cpi was flat. you are supposed to tighten with higher inflation. we have deflation. my argument, and you heard me say this a million times, the fed should move at the pace of
an injured snail. take your time. this is not the right moment. i agree with them. i hope they bypass september. for all i know, they can wait till next year. >> if that's the case with the fed, what is it about what you are hearing from donald trump presidential candidate that runs counter to that? >> this is the part that bothers me. i like to be optimistic on the stock market. mr. trump, who is a friend, okay? this is not personal. in my opinion is pursuing very negative, anti-growth policies. he is a protectionist. i wants to go after china, mexico, japan. he wants to devalue the dollar. he wants masdea portation throughout the country rather than constructive immigration reform. do we want a trade war? do we want the dollar to collapse? do we want to be fighting japan and china? these are negatives. i can't believe the republican party is even thinking about going in this direction. we should be slashing corporate
tax rates. we should be opening up free trade. we should be stabilizing the dollar. i want things that are going to help america be great, which is mr. trump's password, fine. this is not the way to do it. protectionism, masds deportatio, sorry. >> larry, we know it is your birthday. we wish you a very happy birthday. what do you want janet yellen to do? not raise interest rates, do more qe? >> two things i would like. it's my 39th birthday. thank you for mentioning that. >> looking great. >> two things i'd like to see right now. number one. either slash or abolish all together the u.s. corporate tax. get rid of it. that's the most pro-growth thing we could do. okay? secondly, i think ms. yellen and the fed should wait until they see some evidence in the
commodity markets or in the bond markets or in the cpi of inflation. if there is no inflation, don't tighten. if you want growth, which i want, forget about trade wars. let's just abolish the corporate tax rate. that will get this economy moving and america will be totally competitive. >> larry, we hope you have a great birthday evening. blowing out those 39 candles. thank you so much for joining us. >> thank you. >> larry kudlow. if you would like to read the full piece go to cnbc.com. home builders getting crushed with the rest of the market today. they've been hot lately. is a sell-off now a buying opportunity? that's next.
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kevin olarry and dally who is in the business and thinks he couldn't be more wrong. the data is jumping. this part of the economy seems to have something behind it. >> kelly, it's enjoying a 20-year cycle where interest rates have done nothing but go down. one of the reasons the market, whether the fan moves in september or december, here is an asset class that never performs well in a rising rate environment. domestic housing -- >> rates are rising again, kevin. >> in a rising rate environment, the cost of housing and capital goes up. the asset class goes flat to down. here is the thing people never remember. the cost of chantransacting is e is the highest in any class you
invest in. >> kevin, you're jealous we make so much money. >> you're addicted to housing. >> look what happened today in the stock market. what are you talking about, seriously? today is the perfect day. >> i'm your frie. i'm going to help you. >> i love you, kevin. >> we'll wean you off housing after 20 years. i called betty ford. there is a special unit for you and others addicted to housing. i'm going to help you. >> i've posted a picture on instagram literally on friday of a house coming on the market, not on the market yet. on monday, fully executed contract. the seller made 28% above what he paid for it this year, just this year still. >> kevin, here is the one thing people take issue with. you keep referencing this rising rate being a problem for housing. rates, if anything, keep moving lower, whatever the fed is about to do not with standing. >> not only that -- >> you and i both know we debate
this every day and one of the reasons we had the worst day of the stock market is this, the concern rates will move. it will not take an asset class lightly but here is the real issue. if dolly had a client that would put $1 million into a house in new york, and she's a great broker there, i would argue she would be better buying dividend earning stocks. the market went down 2.3% on the dow. dividend stocks down 1.5% and over performed as an asset and dolly, i'm worried about is you should get people to buy other assets besides houses. >> last word, dolly. >> let's get diversified. >> kevin you view to live somewhere based on the incredibly high rentals today, you're better off buying than renting and at the end of the day, that's what it's about. >> got to leave it there. the debate i know will continue twitter. dolly, kevin, appreciate it. thank you so much. up next, we'll kick off the
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all day long we've been asking which are the most over valued. dominic chu join us. >> then there was one. you the viewers and readers voted and this is what you've come up with. basically came down to nike versus chipotle and you can see here what you guys thought. again, that was the most relatively at least over valued was chipotle shares. interestingly enough for chipotle. that is perhaps barricades. the stock had a huge runup but again, this is stock that trades just where analysts think right now so they have to up or lower the targets here. it also has just for context here trades at around 45 times trailing earnings and five times sales so a fairly rich valuation, however, you're talking about a company, as well, that has grown the revenues by 22% compounded annually over five years. so again, the growth is there but just interesting here, guys, that this is what's happening with the poll. >> it haunts me, dom, thank you.
ahead of the tape column years ago when it was at 140 and look now. guys, thank you for joining me. this market craziness and we'll hand it over to "fast money." melissa lee, you guys and the gang, what's up. >> we'll give you the trade, kelly. "fast money" starts right now live from the nasdaq overlooking new york city's times square. dan nathan, brian kelly, kelly fineman. it was the worst day for stocks in a year and a half and that only begins to describe the chaos, the dow dumb bling 358 points. the s&p negative on the year. the nasdaq closing below the 200-day moving average. small caps falling more than 2%. the question tonight is simple, are we seeing the start of a correction? guy? >> sort of feels that way, mel. let's put it in context for folks tuning in for the first time.